Writing about random topics

A few billion here, a few billion there…

I remember last year, President Bush pushed through Congress and the Senate an approximately $200 billion economic stimulus package. At the time, many people criticized the move saying it wouldn’t work or do anything to stimulate the economy. It was not nearly enough money, or it was going to the wrong people in society, or people would only be paying off bills and not spending money in the sectors it was needed, or some other excuse.

The President’s opponents (naturally) were criticizing the move. Of course, in politics, that’s what you do. In public, you criticize your opponents but privately you readily agree to spending taxpayer money. At the time, we all thought that it was a lot of money. But at the same time, it was a year ago. It was before every financial company on Wall Street went under.

Now that Senator Barack Obama is about to take office, we’re now talking about an $825 billion stimulus package! That’s quadruple the original! I’m starting to get a little concerned about where all this money is coming from, and worse still, where all this money is going.

I remember a few years ago, a friend of mine in the financial industry was telling his views about why investing for the long term was a good idea. "The Great Depression can never happen again," he said. "There are mechanisms in place to prevent that." Now, I don’t think that we’re going to go into a depression. That sounds too extreme because at its height, there was 25% unemployment during the depression. However, we are certainly seeing wealth eroded at a rate worse than any we have seen since then. I think that this market crash is probably worse than the 2000-2003 bear market. Think that one sucked? This one is worse.

I have been out of the market in my personal trading account for 4 months. I haven’t been actively trading for over a year (just buy-and-watch-and-finally-sell). The markets are just too crazy right now. We see 5% swings in a single day. In years past, 5% swings in a month were considered big months. Eventually, though, the market will finish correcting, things will get back to normal, and I can get back into the market. I hope it’s soon, I’m starting to get bored.